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Getting Started with Data Governance, Part 2

This is the third article in an ongoing series on Data Governance sponsored by SAP. Here are Part One and Part Two of the series.

Why is this stuff so hard?

Companies aren’t used to governing data across the entire enterprise. It goes against their well honed instincts, to break things up into smaller units or silos to make them more manageable. Where they do have data governance in place, it’s usually done at an application or business unit level.

And it can be tough to show ROI for data governance.

But companies with effective governance processes in place generate up to 40% higher ROI on their IT investments than their competitors, according to Peter Weill and Jeanne Ross in “IT Governance: How Top Performers Manage IT Decision Rights for Superior Results” (Boston: Harvard Business School Press, 2004).

The bottom line is that managing things, when you have control over them yourself, is hard enough. Governing them, when you have to consult with others, gradually win them over, and lobby for things that matter deeply to you, is hard work!

How to get started

First, it’s important to avoid “analysis paralysis”. Since many organizations don’t know where to start, they do nothing at all.

Analyzing your current state and desired future state, using a maturity model as we discussed in the previous article, provides a framework for planning your activities and managing your expectations, enabling you to proceed.

Start by defining with some degree of precision (1) where the company is now, (2) where the company wants to be, and (3) over what period of time.

Then look at the critical elements such as MDM, data integration, data quality, data enrichment, data governance, business process management, BI, enterprise content management, and information lifecycle management over time. This should lead to a realistic plan and design. For more information on how to create a strategic roadmap, see James Parnitzke’s article on that topic.

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Spend time on the design before launching

Don’t let yourself be rushed into getting organized too soon. Setting up a Data Governance Council too early is a classic failure mechanism!

Spend time on things like developing the data governance program’s overall vision and strategy, and its value statement – its reason for existing. Your stakeholders will want to know the answers to some basic questions like “where will the program live, and how will it be funded?”

Once you have the basics outlined, you can move on to the more detailed elements of the design. Who will be involved? How will the program be organized? Will it be centralized or de-centralized? Why are we doing this? What will the DG program do for the enterprise?

Before you launch a formal governance council, you need to have positioned the initiative to a key executive sponsor. Without them, the council will be just another meeting. Another point to keep in mind is that a global council can work cooperatively with local groups. Some companies think the global group is going to wind up being too big because it has to centrally govern all aspects of Customer, for example, instead of defining the 10 critical attributes across business processes and simply starting there.

Whatever you decide on these questions, working from a solid design is a lot easier than making it up as you go along.

When to start establishing Data Governance

Ideally, you would start about six months before starting any MDM initiative, so that your new DG group would have a chance to form itself, and then help drive the MDM initiative.

But don’t start before you’ve got your executive sponsorship and funding lined up. You’ll just end up with a failed data governance effort to explain away later. It’s better to wait until everything is lined up than start before you’re ready.

Then get ready for the ride of your life – corporate politics, new technology, organizational change, marketing communications, project management, you name it!